How To Get a Salvage Title Removed on a Vehicle
It is not always possible to restore a car to drivable condition after a major accident. You may have to deal with a salvage title in addition to the physical damage to the vehicle.
A salvaged car is one that has been determined by an insurance company to be a total loss, which means that it will cost more to repair than the car is worth. (Formulas differ by state). This is a problem if you want to sell or use the vehicle again.
What Can You Do With a Salvage Vehicle?
In most states, you cannot drive or insure a salvage title car, and it is difficult to find a company willing to insure or finance the purchase of even a previously salvage-titled car. Most reputable dealerships will also refuse to accept a salvage vehicle as a trade-in.
- When an insurance company declares a vehicle a total loss, the title is "branded" as salvage.
So the question is, how do you clear a salvage title?
Title Name Games
It's important to note that attempting to conceal a car's history in a way that violates state regulations is a serious crime known as "title laundering" or "title washing." Every state has its own auto-licensing regulations, and you should always check your state's unique registration requirements and titling rules before considering a salvage title car.
Most jurisdictions have rules that are fairly similar. When a vehicle's title is branded as salvage, it is never re-titled as it was before. However, in the majority of states, the title can be rebranded as "rebuilt title" (or, in some places, "reconditioned" or "assembled"). This will necessitate repairing the vehicle and submitting it for inspection to the Department of Motor Vehicles (DMV). If it is approved, the DMV will rename the title "rebuilt."
So, technically, the salvage title could be removed and replaced with a rebuilt title. Anyone who is familiar with vehicle titles (or car-history reporting services) will recognise that the word "rebuilt" indicates that the vehicle was previously branded as salvage. This includes all insurance companies as well as any knowledgeable potential buyers. If that is a major issue for you, you should skip the salvage game. If not, continue reading.
The Steps to Rebuilding a Title
Here's a quick rundown of the steps you'll usually need to take to remove a salvage title.
Purchase the Vehicle
This may or may not be as straightforward as it appears. Some states restrict the purchase or ownership of salvage title vehicles to licensed rebuilders only. If that is the case in your state, you will only be able to own the vehicle after it has been repaired, inspected, and rebranded.
Repair the Vehicle
Make certain that you understand what you're doing, or have the vehicle repaired by a certified mechanic who does. Keep all vehicle paperwork and take lots of pictures before and during the repair process.
Get the Inspection
Obtain and fill out the necessary forms from the DMV to have the car inspected. This is where all of that paperwork and those photos come into play. The DMV will most likely require you to submit your bill of sale, the salvage title, the photos, and other documentation as part of the process. Once the paperwork is completed, schedule an inspection and have the vehicle inspected.
- You can't legally drive the vehicle to the inspection facility, so you'll have to have it towed there.
The inspector may attach a decal to the vehicle indicating that it has passed the inspection after it has passed and you have paid the inspection fees.
File the Final Paperwork
Your next step will be to apply for the rebuilt title, which will entail more paperwork and fees. You should then receive the title, which should bear a statement indicating that the vehicle has been rebuilt.
- If your vehicle was salvaged in another state, you may need to have it inspected and rebranded in that state before you can register it in your home state. Before making a purchase, check the laws in your state.
Frequently Asked Questions (FAQs)
How much does a rebuilt title affect a car's value?
A rebuilt title will reduce the value of the vehicle by 20% to 40%. That's the rule of thumb used by the industry.
Why do I need a bill of sale for a salvage inspection?
A bill of sale is required to demonstrate that you legally obtained possession of the vehicle. If you bought the car new and it never changed hands, you might not need one.
What happens during a salvage inspection?
The primary goal of a salvage inspection is to ensure that all necessary parts are present in the vehicle and that nothing has been stolen or illegally altered. The inspector will examine the parts of the vehicle and cross-reference them with supporting documentation.